People who make an income in Turkey are obliged to pay tax, and your real estate in Turkey will also be subject to taxation. In Turkey, the greater your income, the higher your tax rate will pay. Turkey’s income tax rates range from 15% to 35% in total (0-10,000 Turkish lira is taxed at 15%; 10,001-25,000 lira is taxed at 20%; 25,001-58,000 lira is taxed at 27%; 58,001 lira and above is taxed at 35%). Non-residents must pay income tax on all income and earnings earned in Turkey, including employment, rental income from their property in Turkey, and company revenue. Certain expenditures, such as insurance and property management costs, can be deducted from your rental property revenue. Also, due to the tax on wealth, as a property owner in Turkey, you will be required to pay taxes on the land and building values of your property each year. These typically range from 0.1 percent to 0.6 percent in total.
b.Capital Gains Tax (on sale of property)
This is the tax you are obliged to pay if you sell your real estate within five years of the purchase date mentioned in your Turkish title deed. Your profit will dictate the rate you will pay as Capital Gains Tax (Profit less than 6,000 Turkish Lira, no CGT; profit between 6,000 Lira and 7,000 Lira, 15%; profit between 7,000 Lira and 18,00 Lira, 25%; profit between 18,000 Lira and 40,000 Lira, 27%; profit any amount over 40,000 Lira, 35%).
Investors will not pay double tax in their country when they bring their money back to their country. Another advantage for foreign investors is that if you acquire a property in Turkey through a company you own and operate in Turkey, you will not be charged with a Capital Gains Tax because it is considered normal business revenue and taxed respectfully.
c.VAT exemption (when buying property)
A new amendment in May 2020 has exempted international investors from paying VAT on their Turkish property assets. The concession is one of many measures taken by the Turkish government to make property investment in Turkey more appealing. Foreigners who are not Turkish citizens and companies that have not made any money in Turkey and do not have a Turkish office or commercial operation constitutes the groups who are free from VAT liability.
If new Turkish real estate properties are acquired from construction enterprises or the total cost is paid in foreign currency, VAT exemption will take place. We need to note that if the buyer sells the property during its first year, the exempt VAT must be paid.
To qualify for VAT exemption, you need to present a notarized copy of your current passport and a document issued by the Turkish tax office stating that the buyer is not resident in Turkey. The latter requires notarized passport translation, notarized proof of foreign address, passport transactions from the Turkish Police Department, letter from the General Directorate of Immigration office that shows the applicant is not resident in Turkey.
d.Property inheritance
It is important for us to enlighten your way with all kinds of information. Longevity is a key aspect when it comes to investment, and in this regard, foreign investors will be delighted to hear Turkish inheritance laws. Unless a property owner has a notarized will, the legal successors of an immovable property in Turkey are decided by the following order of succession: The spouse and children are the first heirs. They will be given a predetermined portion. If there are no children, the property is automatically passed down to the parents as heirs. If the dead owner’s parents are no longer living, the estate will be passed down to the deceased owner's siblings. Finally, the deceased’s grandparents and their offspring come last in the line of succession. If the deceased has no living relatives, the estate passes to the Republic of Turkey.
With a fairly reasonable rate of inheritance tax, Turkey taxes 1% for values up to $58,000, 3% for value of $186,000, 5% for value of $466,830, 7% for value of $1,013,000. Turkey takes the payment of this tax within a three-year period. This taxation applies to both Turks and foreigners in Turkey.
More Details on Taxation in Turkey
a.Income Tax
People who make an income in Turkey are obliged to pay tax, and your real estate in Turkey will also be subject to taxation. In Turkey, the greater your income, the higher your tax rate will pay. Turkey’s income tax rates range from 15% to 35% in total (0-10,000 Turkish lira is taxed at 15%; 10,001-25,000 lira is taxed at 20%; 25,001-58,000 lira is taxed at 27%; 58,001 lira and above is taxed at 35%). Non-residents must pay income tax on all income and earnings earned in Turkey, including employment, rental income from their property in Turkey, and company revenue. Certain expenditures, such as insurance and property management costs, can be deducted from your rental property revenue. Also, due to the tax on wealth, as a property owner in Turkey, you will be required to pay taxes on the land and building values of your property each year. These typically range from 0.1 percent to 0.6 percent in total.
b.Capital Gains Tax (on sale of property)
This is the tax you are obliged to pay if you sell your real estate within five years of the purchase date mentioned in your Turkish title deed. Your profit will dictate the rate you will pay as Capital Gains Tax (Profit less than 6,000 Turkish Lira, no CGT; profit between 6,000 Lira and 7,000 Lira, 15%; profit between 7,000 Lira and 18,00 Lira, 25%; profit between 18,000 Lira and 40,000 Lira, 27%; profit any amount over 40,000 Lira, 35%).
Investors will not pay double tax in their country when they bring their money back to their country. Another advantage for foreign investors is that if you acquire a property in Turkey through a company you own and operate in Turkey, you will not be charged with a Capital Gains Tax because it is considered normal business revenue and taxed respectfully.
c.VAT exemption (when buying property)
A new amendment in May 2020 has exempted international investors from paying VAT on their Turkish property assets. The concession is one of many measures taken by the Turkish government to make property investment in Turkey more appealing. Foreigners who are not Turkish citizens and companies that have not made any money in Turkey and do not have a Turkish office or commercial operation constitutes the groups who are free from VAT liability.
If new Turkish real estate properties are acquired from construction enterprises or the total cost is paid in foreign currency, VAT exemption will take place. We need to note that if the buyer sells the property during its first year, the exempt VAT must be paid.
To qualify for VAT exemption, you need to present a notarized copy of your current passport and a document issued by the Turkish tax office stating that the buyer is not resident in Turkey. The latter requires notarized passport translation, notarized proof of foreign address, passport transactions from the Turkish Police Department, letter from the General Directorate of Immigration office that shows the applicant is not resident in Turkey.
d.Property inheritance
It is important for us to enlighten your way with all kinds of information. Longevity is a key aspect when it comes to investment, and in this regard, foreign investors will be delighted to hear Turkish inheritance laws. Unless a property owner has a notarized will, the legal successors of an immovable property in Turkey are decided by the following order of succession: The spouse and children are the first heirs. They will be given a predetermined portion. If there are no children, the property is automatically passed down to the parents as heirs. If the dead owner’s parents are no longer living, the estate will be passed down to the deceased owner's siblings. Finally, the deceased’s grandparents and their offspring come last in the line of succession. If the deceased has no living relatives, the estate passes to the Republic of Turkey.
With a fairly reasonable rate of inheritance tax, Turkey taxes 1% for values up to $58,000, 3% for value of $186,000, 5% for value of $466,830, 7% for value of $1,013,000. Turkey takes the payment of this tax within a three-year period. This taxation applies to both Turks and foreigners in Turkey.